Which statement is true A IAS 12 states the following Deferr

Which statement is true? A) IAS 12 states the following: Deferred tax assets and liabdities shall be discounted. B) Enterpises are expected to keep very detaled scheduling of the timing of the reversal of each temporary difference. C)To permit, but not require discounting would result in deferred tax assets and liablties which would be comparable between entities. D) The rationale for not discounting 1.8 is based on considerations of costs and benefits as well as comparablity among enterprises.

Solution

Ans. is b) Enterprises are expected to keep very detailed scheduling of the timing of the reversal of each temporary difference.

Explanation: As per IAS 12 which states the following:

Line no 53 Deferred tax assets and liabilities shall not be discounted.

Line no 54 Reliable determinations of deferred tax assets and liabilities on a discounted basis requires detailed scheduling of the timing of the reversal of each temporary differences.

Also To permit but not require discounting would result in deferred tax assets and liabilities which would not be comparable between entities.

The rationale for not discounting is based on considerations of comparability among enterprises there is no consideration given to cost and benefits.